Aminex Concludes Two Deals Regarding WEEM Block
Aminex Petroleum Egypt Ltd (APEL) said on 4 August that it had concluded two separate deals concerning its West Esh El-Mellah (WEEM) Block 2 concession, onshore in the Eastern Desert near the Gulf of Suez. The company has finalized a farm-out agreement with Canada’s Groundstar Resources for a 20% interest in WEEM in exchange for 40% funding from Groundstar, which is to invest up to $3.6mn in the block during a three-year exploration program that may require an investment of $9mn. Besides Aminex, other shareholders in APEL are First Energy, PetroSino and FS International Corporation.
Under a separate agreement with the original shareholders of APEL (formerly known as Red Sea Petroleum), First Energy has been acquired jointly by Volant Petroleum of Australia and Karl Thomson Group of Hong Kong. This arrangement will reduce Aminex’s beneficial shareholding in APEL to 12.5%. Aminex said its 12.5% share of exploration costs for APEL’s 80% interest in WEEM would now be carried through to first commercial production, free of financial commitment. This equates to a carried interest of 10% in the WEEM concession, Aminex said. The WEEM license (1,328 sq km) calls for three exploration wells to be drilled during an initial three-year period, which will begin following official signing of the license by Egypt’s Ministry of Petroleum. There is existing 3D seismic for the block and drilling is scheduled to begin in 2007. The WEEM license is adjacent to a block operated by Lukoil that is producing 12,000 b/d from five wells.
Groundstar Farms-In to West Kom Obmo Block 2
The acquisition of WEEM shares is the second farm-in for Groundstar in Egypt in recent months. In June it announced that it had agreed with Pan Pacific Petroleum Egypt (PPPEgypt) to increase its working interest in the West Kom Ombo Block 3 in Upper Egypt. Block 3 (42,291 sq km) is immediately west of Block 2, which is operated by Centurion Energy International. Groundstar raised its interest in Block 3 from 42.5% to 60% by agreeing to cover 100% of the cost – estimated at $7.1mn – during the first two exploration phases over a five year period.
